NMTC Process

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NMTC Process Flow Chart

The flow chart below shows the structure and financial entities involved in the NMTC application process. For more detailed information, simply hover your mouse over the desired area. Getting NMTC approval for your project is complex and time consuming. Working with an experienced partner like True Mountain Capital is key for success.

role="img" aria-labelledby="chartTitle chartDesc" preserveAspectRatio="xMidYMin meet" style="max-width:100%;height:auto;display:block"> NMTC Process Flow Chart Flow from Leverage Lender and Investor into Investment Fund; Investment Fund to Community Development Entity; CDFI Fund into CDE; and CDE to QALICB. An entity – typically affiliated with the Sponsor – that provides debt (the “Leverage Loan”) into a fund where it can be pooled with an equity investment from the NMTC Investor and ultimately lent to a QALICB to improve property. Leverage Lender A special purpose vehicle that (a) pools the capital provided by the leverage lender and the NMTC Investor and (b) funds a Qualified Equity Investment into one or many CDEs. Investment Fund An individual or entity that makes an upfront equity investment into a NMTC-eligible project, in exchange for a 7-year stream of New Markets Tax Credits. Investor A subset of the U.S. Treasury that administers the NMTC program, annually awarding $5Bn of NMTC allocation authority to CDEs. CDFI Fund An organization certified by the CDFI Fund that applies for NMTC allocation and deploys that allocation into NMTC-eligible projects. CDEs receive the Investor’s equity and the Leverage Loan. CDE Community Development Entity A business in a low-income, severely distressed census tract that creates jobs and/or provides goods and services to the surrounding Low-Income Community QALICB Qualified Active Low Income Community Business
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